Bond Market Update

Data Recon

• U.S. Treasuries have added to their initial gains after the release of the Employment Situation report for February, which showed below-consensus growth in nonfarm payrolls and a notable rise in the U-6 unemployment rate. The post-data advance has sent the Treasury complex toward highs from Wednesday with the 10-y yield sliding back below its 200-day moving average (4.235%).  
• February nonfarm payroll growth was an okay 151,000, average hourly earnings growth was an okay 0.3%, the unemployment rate was an okay 4.1%, and the average workweek was a not-so-okay 34.1 hours. The labor force participation rate dropped and so did the employment-to-population ratio. The U-6 unemployment rate, which accounts for unemployed and underemployed workers, increased to 8.0% from 7.5%. That isn't okay.
  • The key takeaway from the report is that it was no better than just okay. It won't be enough to silence the growth concerns that have echoed in recent weeks through other data releases.
• Yield Check:
  • 2-yr: -6 bps to 3.91%
  • 3-yr: -7 bps to 3.91%
  • 5-yr: -7 bps to 3.99%
  • 10-yr: -6 bps to 4.23%
  • 30-yr: -4 bps to 4.54%